Texas GOP plan uses $6B from Rainy Day Fund

By Paul J. Weber
The Associated Press

4/11/2013

AUSTIN, Texas — Abandoning resistance to dip into a stockpile of cash reserves, Senate Republicans unveiled a plan Thursday to spend $6 billion from Texas' Rainy Day Fund for urgent water and road projects, and did not rule out taking even more for public schools.

The unexpected GOP proposal would use roughly half of a projected $12 billion socked away in the state's emergency piggybank — which Gov. Rick Perry and other top Republicans have fiercely safeguarded in recent years, even as the balance soared and state budgets were slashed.

The new plan calls for $2.5 billion for water projects and $3.5 billion to expand and repair crumbling and congested highways across Texas.

Democrats pounced on the proposal to request digging deeper into the Rainy Day Fund to help public schools hit with historic budget cuts in 2011.

Republican state Sen. Tommy Williams, the chief budget-writer in the Senate, did not shoot them down.

"The answer is yes, I'd be willing to consider that," Williams said.

Voters would have to authorize the spending by approving a constitutional amendment in November.

The price tag is by far the most money the Legislature has suggested taking from the stockpile of excess oil and gas tax receipts this session. The fund balance had been expected to grow to nearly $12 billion if left unspent.

In his State of the State speech in January, Gov. Rick Perry proposed using $3.7 billion from the fund for infrastructure. His office did not immediately respond to an email seeking comment Thursday on the Senate plan.

The proposal cleared unanimously the powerful Senate Finance Committee, but one Republicans warned he would not ultimately support the bill as written.

Sen. Kevin Eltife has challenged his party this 140-day session on opposition to any tax increases, and said Thursday that more revenue is the only way to cure the state's continually underfunded and under-built transportation system.

"Taxes. I know everybody is going to have a heart attack when I say the word," Eltife said. "We have to have new money for TxDOT or we're never going to solve this problem. Continuing to borrow money will not solve it. It's real easy for politicians to borrow cheap money to solve problems. But that's a tax on future generations."

Republicans have argued that the fund was created for one-time expenses and natural disasters, and not recurring costs such as school funding. Calls to restore money to school districts by tapping the fund have persisted even into this session, and continued after Williams laid out the bill for the first time Thursday.

Democratic Sen. Royce West offered an immediate amendment to take $2.4 billion from the fund for education, but withdrew the proposal after Williams said he was open to a conversation about more school funding.

"We won't just discuss it," West said. "We'll address it."

Williams' proposal would create separate water and transportation funds. The state water plan lists $53 billion in projects that have taken on heightened urgency by lawmakers in the wake of a historic Texas drought.

Momentum to put more money toward transportation projects, on the other hand, has struggled to gain traction in the 140-day session that ends next month. The Texas Department of Transportation has said it needs an extra $4 billion annually to keep up with maintenance and a booming Texas population.

A provision in the bill prohibits the money from being spent on passenger rail.